FEBRUARY 18, 2025 SUPPLEMENTAL FINANCIAL REPORT FOURTH QUARTER 2024 1 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This presentation may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use o ...

Financial Data and Key Metrics Changes - The company reported a fourth quarter GAAP net loss attributable to common stockholders of $19.7 million or $0.16 per share [7] - Distributable earnings for the fourth quarter were $13.7 million or $0.11 per share, with adjusted distributable earnings at $23.7 million or $0.18 per share [7][32] - Current liquidity stands at $418 million, with $253 million being unrestricted cash [7][39] - GAAP net book value decreased to $8.08 per share from $8.39 per share, while undepreciated book value decreased to $8.89 per share from $9.11 per share [34] Business Line Data and Key Metrics Changes - The company funded five new loans totaling $119 million during the quarter, all in multifamily properties, with an additional $59 million in closing [16][25] - The total number of watch list loans was reduced to seven from nine, with watch list exposure standing at $411 million, down from $456 million [26][29] - The company received $93 million in repayments across four loans during the fourth quarter, with total repayments and resolution proceeds reaching $198 million [24] Market Data and Key Metrics Changes - The commercial real estate debt markets have shown improvement, with CLO issuance increasing and AAA spreads tightening by approximately 50 basis points [11] - Higher interest rates and a surge in insurance company annuity sales have driven compression in credit spreads, although lending rates remain elevated [12][15] - The ten-year treasury yield is about 65 basis points higher compared to the end of the third quarter [14] Company Strategy and Development Direction - The company is focused on rebuilding its loan book and executing a new CLO, with a target to originate over $1 billion in new loans in 2025 [51][102] - The strategy includes resolving watch list loans and executing REO dispositions to generate capital for growth [21][82] - The company aims to maintain and potentially grow its dividend by increasing its loan portfolio to over $3 billion [52][102] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ability to grow the loan portfolio and earnings, despite challenges in the current interest rate environment [22][108] - The company anticipates a modest amount of negative coverage while redeploying capital and expects to reach sustained positive dividend coverage [21][75] - Management noted that the market is currently in a state of "transaction limbo," with many borrowers facing challenges due to high interest rates [53] Other Important Information - The company recorded specific CECL reserves of approximately $10 million during the fourth quarter, primarily related to a Fort Worth multifamily loan [35] - The debt to assets ratio is 65%, and the total debt to equity ratio is 2.2 times [39] - The company has no corporate debt or final facility maturities due until 2027 [39] Q&A Session Summary Question: Comments on proactive asset management and outlook for CLO spreads - Management acknowledged the proactive asset management strategy and confirmed intentions to execute another CLO, which would enhance ROE [46][48] Question: Expectations for portfolio growth in 2025 - Management indicated a need to originate over $1 billion in loans to sustain and potentially grow the dividend, with a goal to exceed a $3 billion portfolio [51][102] Question: Clarification on general seasonal reserve increase - Management clarified that the increase in reserves is primarily related to risk-ranked loans, with no specific concerns regarding rent growth on the West Coast [60][61] Question: Path forward on resolving the San Jose Hotel asset - Management expressed satisfaction with exiting bankruptcy court and emphasized the focus on resolving the San Jose Hotel loan, which is a significant part of the watch list [63][65] Question: Timeline for getting back to a steady state on originations - Management estimated it would take the full year to stabilize the origination pipeline, with a focus on lender-driven transactions [70][75] Question: Actionable assets in the REO portfolio - Management highlighted plans for value-add strategies on multifamily properties in Texas and emphasized the importance of resolving REO assets for capital generation [78][82]

分组1 - BrightSpire (BRSP) reported quarterly earnings of $0.18 per share, matching the Zacks Consensus Estimate, but down from $0.28 per share a year ago [1] - Colony Credit posted revenues of $17.46 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 9.81% and down from $30.21 million year-over-year [2] - The earnings outlook for Colony Credit is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] 分组2 - The current consensus EPS estimate for Colony Credit is $0.19 on revenues of $19.38 million for the coming quarter and $0.79 on revenues of $82.31 million for the current fiscal year [7] - The REIT and Equity Trust industry is currently in the top 35% of Zacks industries, suggesting that stocks in this category have a higher likelihood of outperforming those in the bottom 50% [8] - ACRES Commercial (ACR), another company in the same industry, is expected to report quarterly earnings of $0.22 per share, reflecting a year-over-year decline of 60% [9]

Core Insights - David A. Johnson is the founder and principal of Endurance Capital Management, specializing in various investment vehicles including stocks, bonds, options, ETFs, REITs, real estate, closed-end funds, hedge funds, and private credit [1]. Group 1 - David A. Johnson has over 30 years of experience in investing and holds a Master of Science (MS) Degree in Finance with a concentration in Investment Analysis from Boston University [1]. - He also possesses a Certificate in Financial Planning and an MBA from Fordham University [1].

Group 1 - The article discusses the presence of detractors and naysayers in public opinion, indicating that both supporters and critics engage with the content equally [1] Group 2 - High Dividend Opportunities (HDO) is highlighted as a prominent community for income investors and retirees, boasting over 8,000 members [2] - The Income Method employed by HDO is designed to generate strong returns regardless of market volatility, simplifying retirement investing [2] Group 3 - HDO offers a Model Portfolio targeting a yield of 9-10%, emphasizing the benefits of dividend investing [3] - A limited-time discount of 17% on the annual price of $599.99 is being promoted to attract new members [3]

Financial Performance - Net interest income for the three months ended September 30, 2024, was $20,725 thousand, down 35.0% from $31,983 thousand for the same period in 2023[14]. - Net income attributable to BrightSpire Capital, Inc. common stockholders for the three months ended September 30, 2024, was $12,729 thousand, slightly up from $12,389 thousand in the same period of 2023[14]. - Net income for the three months ended September 30, 2024, was $11,421,000, compared to a net income of $12,392,000 for the same period in 2023, reflecting a decrease of approximately 7%[15]. - Comprehensive income attributable to common stockholders for the three months ended September 30, 2024, was $13,132,000, compared to $12,894,000 in the prior year, indicating an increase of about 2%[15]. - The company reported a net income (loss) per common share - basic of $0.10 for the three months ended September 30, 2024, consistent with the same period in 2023[14]. Assets and Liabilities - Total assets decreased from $4,198,254 thousand as of December 31, 2023, to $3,838,425 thousand as of September 30, 2024, representing a decline of approximately 8.6%[9]. - Total liabilities decreased from $2,919,788 thousand to $2,751,900 thousand, a decline of approximately 5.7%[9]. - Total stockholders' equity as of September 30, 2023, was $1,315,294,000, a decrease from $1,322,542,000 as of June 30, 2023[17]. - As of September 30, 2024, total stockholders' equity was $1,086,525, a decrease from $1,278,466 as of December 31, 2023[19]. - The company had $1.2 billion carrying value of CRE debt investments financed with $848.4 million under the Master Repurchase Facilities as of September 30, 2024[195]. Loans and Credit Losses - Loans held for investment decreased from $2,936,506 thousand as of December 31, 2023, to $2,586,341 thousand as of September 30, 2024, a reduction of approximately 11.9%[9]. - The current expected credit loss reserve increased significantly from $76,028 thousand to $155,490 thousand, indicating a rise of 104.5%[9]. - The Company increased its CECL reserve by $115,556 thousand for the nine months ended September 30, 2024, compared to an increase of $76,083 thousand for the same period in 2023[121]. - The Company charged off $28,022 thousand related to loans held for investment during the nine months ended September 30, 2024, compared to $14,477 thousand for the same period in 2023[121]. - The Company’s total loans held for investment as of September 30, 2024, amounted to $2,586,341 thousand, with $149,060 thousand classified as 90 days or more past due[128]. Income and Expenses - Total expenses for the three months ended September 30, 2024, were $37,661 thousand, down from $46,315 thousand in the same period of 2023, a decrease of approximately 18.0%[14]. - The company recorded income tax expense of $0.2 million for the three months ended September 30, 2024, consistent with the $0.2 million recorded in the same period of 2023[108]. - For the nine months ended September 30, 2024, the Company recorded income tax expense of $0.7 million, a decrease from $0.9 million in the same period of 2023[108]. Real Estate and Property Operations - Property operating income for the three months ended September 30, 2024, was $26,051 thousand, an increase of 7.4% compared to $24,247 thousand for the same period in 2023[14]. - The company recorded $45.2 million of impairment related to three office properties in Q2 2024 due to a reduction in the expected holding period[154]. - The company sold a Washington D.C. office property for a gross sales price of $21.5 million, resulting in a gain on sale of $0.1 million during Q3 2024[157]. - The company consolidated the assets and liabilities of a multifamily property in Arlington, Texas, in Q3 2024, which was previously determined to be a variable interest entity (VIE)[147]. - The company acquired four office properties and one multifamily property during the year ended December 31, 2023, with a total purchase price of $181.864 million[152]. Shareholder Equity and Dividends - The company declared dividends of $0.20 per share, totaling $26,000,000 for the three months ended September 30, 2023[17]. - The company declared dividends and distributions of $0.20 per share, totaling $(26,233) for the nine months ended September 30, 2024[22]. - The weighted average shares of common stock outstanding - basic increased from 127,197 thousand to 127,515 thousand, reflecting a growth of 0.25%[14]. Market Conditions and Strategy - The market for office properties remains challenged, with rising vacancy rates and lower demand compared to pre-COVID-19 levels, posing risks for future valuation impairments[29]. - The Company continues to focus on originating first mortgage loans as its primary investment strategy, with plans to selectively originate mezzanine loans and preferred equity investments[27]. - The Federal Reserve's interest rate cuts in the second half of 2024 may impact the Company's financing and refinancing opportunities, although the timing and extent of future cuts remain uncertain[29]. Accounting and Compliance - The Company is evaluating the impact of new accounting standards issued by the FASB, including ASU No. 2023-07 and ASU No. 2023-09, which will affect segment reporting and income tax disclosures respectively[117][118]. - The Company evaluates acquisitions to determine if they qualify as business combinations, impacting how assets and liabilities are recognized and measured[53]. - The Company had no loans classified as held for sale as of September 30, 2024, and December 31, 2023[61].

Financial Data and Key Metrics - GAAP net income attributable to common stockholders was $12.7 million, or $0.10 per share, while distributable earnings were $17.9 million, or $0.14 per share, and adjusted distributable earnings were $27 million, or $0.21 per share [7] - Current liquidity stands at $416 million, with $251 million in unrestricted cash [8] - GAAP net book value decreased to $8.39 per share from $8.41 per share quarter-over-quarter, while undepreciated book value increased to $9.11 from $9.08 per share [37] - The company paid a dividend of $0.16 per share and had earnings from cash flow of $0.17 per share [40] Business Line Data and Key Metrics - The company completed its third CLO transaction of $675 million, which includes an $85 million ramp and a two-year reinvestment period [12] - The remaining loan portfolio consists of 76 investments with an average loan balance of $34 million [24] - The company received $146 million in repayments and resolution proceeds across 11 investments during the quarter [23] - Future funding obligations stand at $108 million, or 4% of outstanding commitments [24] Market Data and Key Metrics - The commercial real estate debt markets are active, with both CMBS and CLO capital markets issuances making a strong comeback year-over-year [10] - Loan and securitization credit spreads have tightened, and bank warehouse spreads have followed suit [11] - The company expects to exit a number of REO or foreclosure assets during 2025 [19] Company Strategy and Industry Competition - The company has restarted loan originations, closing on its first loan post-quarter end and quoting new loans to rebuild the pipeline [15] - The company is focused on growing the loan portfolio and earnings, leveraging improved capital market conditions and rate cuts [16] - The company is internally managed, which is seen as a differentiator in the market, with a vertically integrated asset management approach [96][97] Management Commentary on Operating Environment and Future Outlook - Management highlighted the improvement in market conditions and the positive results from portfolio management efforts [9] - The company is optimistic about the commercial real estate market, citing the reduction in short-term rates as a positive factor [11] - Management expects the investment portfolio to continue tracking positively as new loans are originated and watchlist and REO assets are resolved [34] Other Important Information - The company repurchased 1.2 million shares at an average price of $552 during the quarter, emphasizing the embedded value in the current share price [21] - The company’s stock is trading at a roughly 40% discount to its undepreciated book value of $9.11 [20] - The company’s dividend yield of approximately 12% is roughly 200 basis points higher than the average for its peer group [19] Q&A Session Summary Question: Outlook for portfolio size and leverage growth - The company expects leverage to grow, potentially reaching 2.5% or higher as it redeploys capital [43] Question: Capital allocation between new investments and stock repurchases - The company has the capacity to continue both new investments and stock repurchases, with over $40 million approved for buybacks [44] Question: Bridge loan portfolio growth by end of 2025 - The company aims to grow the bridge loan portfolio by $1 billion, leveraging its cash balance and under-levered assets [53][55] Question: Potential evolution into fixed-rate lending or CMBS conduit lending - While the company has the capability, it currently sees higher barriers to entry and prefers to focus on optimizing its balance sheet [56][59] Question: Timelines for watchlist resolutions and potential CECL reserve releases - The company expects faster resolutions on several watchlist loans, with some potentially moving to REO or being upgraded [65][69] Question: Dividend policy and earnings trajectory - The company cut the dividend to align with cash coverage and expects to hover around breakeven, with potential leakage depending on capital deployment [70] Question: Pipeline growth and origination timing - The company is seeing gradual demand recovery, with a focus on multifamily, industrial, retail, and hospitality sectors [73][80] Question: Long Island City REO assets - The company is receiving interest in the Long Island City assets but expects a longer process, potentially cutting bait by mid-2025 if leasing traction does not improve [81][83] Question: ROEs on CLOs and warehouse lines - The company expects mid-teens ROEs on CLOs, with spreads tightening commensurately with lending spreads [87][91] Question: Differentiation of BrightSpire in the market - The company’s vertically integrated asset management and special servicing capabilities are key differentiators, allowing for high-touch borrower engagement and efficient portfolio growth [96][98]

OCTOBER 29, 2024 1 BRIGHTSPIRE CAPITAL SUPPLEMENTAL FINANCIAL REPORT THIRD QUARTER 2024 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This presentation may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking state ...

分组1 - BrightSpire (BRSP) reported quarterly earnings of $0.21 per share, exceeding the Zacks Consensus Estimate of $0.19 per share, but down from $0.28 per share a year ago, representing an earnings surprise of 10.53% [1] - Colony Credit posted revenues of $20.73 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 14.16%, and down from $31.98 million year-over-year [2] - Colony Credit shares have declined approximately 28.8% year-to-date, contrasting with the S&P 500's gain of 22.1% [3] 分组2 - The earnings outlook for Colony Credit is mixed, with the current consensus EPS estimate at $0.19 on revenues of $23.79 million for the upcoming quarter, and $0.82 on revenues of $100.58 million for the current fiscal year [7] - The REIT and Equity Trust industry is currently ranked in the top 35% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - ACRES Commercial, another company in the same industry, is expected to report quarterly earnings of $0.39 per share, reflecting a year-over-year decline of 46.6%, with revenues anticipated to be $10.6 million, down 27.7% from the previous year [9][10]

Company Overview BrightSpire Capital's Q3 2024 performance, financial highlights, and strategic activities are presented [Q3 2024 Highlights and Subsequent Events](index=3&type=section&id=SUMMARY%20RESULTS%20%26%20SUBSEQUENT%20EVENTS%20UPDATE) In Q3 2024, BrightSpire Capital reported GAAP Net Income of $12.7 million and Adjusted Distributable Earnings of $27.0 million, or $0.21 per share, maintaining a quarterly dividend of $0.16 per share, while repurchasing 1.2 million shares, receiving $127 million in loan repayments, and reducing the watch list, with subsequent events including a $675 million CLO closing, an REO property sale, and a new loan commitment, maintaining strong liquidity of $416 million Q3 2024 Key Financial Results | Metric | Amount | Per Share | | :--- | :--- | :--- | | GAAP Net Income | $12.7 million | $0.10 | | Distributable Earnings | $17.9 million | $0.14 | | Adjusted Distributable Earnings | $27.0 million | $0.21 | | Quarterly Dividend | - | $0.16 | - The company's loan portfolio stands at **$2.6 billion** with a weighted average risk ranking of 3.2, consistent with the trailing twelve months[13](index=13&type=chunk) - Portfolio management activities included receiving **$127 million** in repayment proceeds from 10 loans and reducing the watch list to 9 loans (**$456 million**) from 12 loans (**$551 million**) in the prior quarter[13](index=13&type=chunk) - Subsequent to quarter-end, the company enhanced its capital position by closing a **$675 million** CLO with a cost of funds at S+2.47% and sold a Washington, D.C. office REO property for **$19 million** in net proceeds[13](index=13&type=chunk) - As of September 30, 2024, the company reported available liquidity of **$416 million**, comprising **$251 million** in unrestricted cash and **$165 million** in undrawn corporate revolver capacity[13](index=13&type=chunk) Financial Performance The company's Q3 2024 financial position, capitalization, and interest rate sensitivity are detailed [Financial Overview](index=5&type=section&id=FINANCIAL%20OVERVIEW) As of Q3 2024, the company's total at-share assets were $3.9 billion, with a total debt of $2.6 billion, resulting in a debt-to-equity ratio of 2.2x, while GAAP book value was $8.39 per share and undepreciated book value stood at $9.11 per share, with a total CECL reserve of $155.7 million, equivalent to $1.20 per share, and no specific reserves recorded, and a capital structure primarily composed of securitization bonds (32%) and master repurchase facilities (29%) Key Financial Metrics as of September 30, 2024 | Metric | Value | Per Share / Ratio | | :--- | :--- | :--- | | Total At-Share Assets (Undepreciated) | $3.9 B | - | | Total Debt Outstanding (UPB) | $2.6 B | - | | Debt-to-Equity Ratio | - | 2.2x | | Book Value (GAAP) | $1.1 B | $8.39 | | Book Value (Undepreciated) | $1.2 B | $9.11 | | General CECL Reserve | $155.7 M | $1.20 / 578 bps | - The Undepreciated Book Value Per Share decreased slightly from **$9.25** at the end of Q2 2024 to **$9.11** at the end of Q3 2024, primarily driven by earnings in excess of dividends (**+$0.05**), offset by non-GAAP real estate impairment and other factors (**-$0.02**)[50](index=50&type=chunk) [Capitalization](index=20&type=section&id=CAPITALIZATION%20HIGHLIGHTS) The company maintains a diversified capital structure of $3.7 billion, with total outstanding debt of $2.6 billion and a debt-to-equity ratio of 2.2x, a blended all-in cost of financing of 6.44%, and the majority of debt being non-recourse, primarily from securitization bonds and mortgage debt, with $1.2 billion in availability under its master repurchase facilities and a fully undrawn $165 million corporate revolver as of October 25, 2024 Capitalization Metrics | Metric | Value | | :--- | :--- | | Total Capitalization | $3.7 B | | Total Outstanding Debt | $2.6 B | | Debt-to-Equity Ratio | 2.2x | | Debt-to-Asset Ratio | 65% | | Blended All-in Cost of Financing | 6.44% | Debt Composition Summary | Debt Type | Recourse Status | W.A. Extended Maturity | W.A. All-in COF | | :--- | :--- | :--- | :--- | | Corporate Revolver | Recourse | Jan-27 | 7.21% | | Master Repurchase Facilities | Limited Recourse | Apr-27 | 7.08% | | Securitization Bonds | Non-recourse | Aug-37 / Aug-38 | 6.55% - 7.32% | | Mortgage Debt | Non-recourse | Jul-29 / Nov-24 | 4.39% - 4.40% | [Interest Rate Sensitivity](index=22&type=section&id=INTEREST%20RATE%20SENSITIVITY) The company's annual net interest income is sensitive to changes in benchmark rates, as 100% of its senior mortgage loan portfolio is floating rate, with a 1.00% (100 bps) decrease in rates negatively impacting annual net interest income by approximately $4.0 million, or $0.03 per share, based on the SOFR rate of 4.85% as of September 30, 2024, while a 1.00% increase would have a positive impact - A 100 basis point (1.00%) decrease in the SOFR benchmark rate would result in an estimated **$4.0 million** decrease in annual net interest income, or **$0.03** per share[82](index=82&type=chunk) - A 50 basis point (0.50%) decrease in the SOFR benchmark rate would lead to an estimated **$2.1 million** decrease in annual net interest income, or **$0.02** per share[82](index=82&type=chunk) Investment Portfolio BrightSpire's investment portfolio, encompassing loans, real estate, and REO assets, is overviewed [Portfolio Overview](index=6&type=section&id=PORTFOLIO%20OVERVIEW) As of Q3 2024, BrightSpire's total investment portfolio has a carrying value of $3.25 billion across 92 investments, dominated by senior mortgage loans (80% by carrying value), with the remaining 20% composed of net lease and other real estate, and diversified by property type with Multifamily (**41%**) and Office (**32%** total) being the largest exposures Total Investment Portfolio Breakdown (at BRSP share) | Investment Type | Investment Count | Carrying Value ($M) | | :--- | :--- | :--- | | Total Loan Portfolio | 76 | $2,431 | | Net Lease & Other Real Estate | 15 | $816 | | CRE Debt Securities | 1 | $2 | | **Total Investment Portfolio** | **92** | **$3,249** | - The portfolio's property type exposure is led by Multifamily at **41%**, followed by Office (**32%** total: **24%** from loans, **8%** from owned real estate), and Hotel at **14%**[51](index=51&type=chunk) [Loan Portfolio](index=7&type=section&id=LOAN%20PORTFOLIO%20OVERVIEW) The $2.6 billion loan portfolio consists of 76 loans, with 98% being floating-rate senior mortgages, a weighted average unlevered all-in yield of 8.2%, and a stable risk ranking of 3.2, with $127 million in repayments in Q3 and the watch list reduced to 9 loans totaling $456 million [Loan Portfolio Diversification & Activity](index=7&type=section&id=LOAN%20PORTFOLIO%20DIVERSIFICATION) The $2.6 billion loan portfolio comprises 76 investments with an average size of $34 million, where senior mortgage loans make up 98% of the portfolio, geographically concentrated in the West (45%) and Southwest (35%), and by property type, Multifamily (51%) and Office (32%) are the largest segments, with Q3 activity including $127 million in repayments and $15 million in additional fundings Loan Portfolio Key Statistics | Metric | Value | | :--- | :--- | | Total Investments | 76 | | Total Loan Portfolio | $2.6 B | | Average Investment Size | $34 M | | W.A. Unlevered All-in Yield | 8.2% | | % Senior Loans (Floating Rate) | 100% | - The loan portfolio is primarily composed of senior mortgage loans (**98%**) with the remainder in mezzanine loans (**2%**)[52](index=52&type=chunk)[58](index=58&type=chunk) - In Q3 2024, loan portfolio activity included **$15 million** in additional fundings and **$127 million** in total repayments[55](index=55&type=chunk) [Loan Portfolio Maturities](index=10&type=section&id=LOAN%20PORTFOLIO%20MATURITIES) The loan portfolio has a weighted average fully extended remaining term of approximately 1.7 years, with minimal final maturities of only $48 million due in 2024, and maturities staggered, with the largest portion (**$1.023 billion**) maturing in 2026 - The company has minimal near-term maturities, with only **$48 million** in carrying value maturing for the remainder of 2024[60](index=60&type=chunk) Fully Extended Loan Maturities (Carrying Value) | Year | Amount ($M) | | :--- | :--- | | 2024 | $48 | | 2025 | $507 | | 2026 | $1,023 | | 2027+ | $226 | [Risk Rankings & CECL Reserves](index=11&type=section&id=LOAN%20PORTFOLIO%20RISK%20RANKINGS%20%26%20CECL%20RESERVES) The weighted average risk ranking of the loan portfolio remained stable at **3.2** in Q3 2024, unchanged from Q2 2024, with loans ranked 4 or 5 (higher risk) decreasing to 9 loans, representing 18% of the portfolio, down from 12 loans (20%) in the previous quarter, and the total CECL reserve standing at $156 million, or $1.20 per share, with no specific reserves - The weighted average risk ranking was unchanged at **3.2** from Q2'24 to Q3'24, indicating stable credit quality in the overall portfolio[66](index=66&type=chunk) - The number of loans rated 4 or 5 (high risk/potential for loss) decreased from **12** in Q2'24 to **9** in Q3'24, representing **18%** of the portfolio by carrying value, down from **20%**[65](index=65&type=chunk) CECL Reserve Overview | Reserve Type | Amount ($M) | Per Share | | :--- | :--- | :--- | | General CECL Reserve | $155.7 | $1.20 | | Specific CECL Reserve | $0.0 | $0.00 | | **Total Reserve** | **$155.7** | **$1.20** | [Watch List Loans](index=13&type=section&id=LOAN%20PORTFOLIO%20WATCH%20LIST%20LOANS) The watch list consists of 9 loans with risk rankings of 4 or 5, including two loans ranked 5: a **$136 million** hotel loan in San Jose, CA, which is on non-accrual status, and a **$42 million** multifamily loan in Fort Worth, TX, with the remaining seven loans ranked 4 and including multifamily and office properties Summary of Watch List Loans (Risk Rank 4 & 5) | Location | Collateral Type | Risk Rank (Q3'24) | Carrying Value ($M) | | :--- | :--- | :--- | :--- | | San Jose, CA | Hotel | 5 | $136 | | Fort Worth, TX | Multifamily | 5 | $42 | | Santa Clara, CA | Multifamily (Land) | 4 | $57 | | Las Vegas, NV | Multifamily | 4 | $47 | | Denver, CO | Multifamily | 4 | $40 | | Reston, VA | Office | 4 | $39 | | Dallas, TX | Office | 4 | $38 | - The largest watch list asset is a **$136 million** senior loan on a hotel in San Jose, CA, which is on non-accrual status and has a risk ranking of **5**[70](index=70&type=chunk) [Net Lease & Other Real Estate](index=11&type=section&id=NET%20LEASE%20REAL%20ESTATE%20%26%20OTHER%20REAL%20ESTATE%20SUMMARY) The Net Lease and Other Real Estate portfolio consists of 15 properties with a total carrying value of $816 million and generated $17.5 million in NOI in Q3 2024, dominated by Office (**58%**) and Industrial (**29%**) properties by carrying value, and geographically diversified across the West (**35%**), Europe (**23%**), and other US regions Net Lease & Other Real Estate Portfolio Summary | Segment | Number of Investments | Carrying Value ($M) | Q3'24 NOI ($M) | | :--- | :--- | :--- | :--- | | Net Lease Real Estate (NNN) | 8 | $523 | $12.4 | | Other Real Estate | 7 | $293 | $5.0 | | **Total / W.A.** | **15** | **$816** | **$17.5** | - By property type, the portfolio's carrying value is composed of Office (**58%**), Industrial (**29%**), Multifamily (**9%**), and Retail (**4%**)[68](index=68&type=chunk) [Real Estate Owned (REO)](index=15&type=section&id=REAL%20ESTATE%20OWNED) The company's Real Estate Owned (REO) portfolio includes four properties acquired between June 2023 and July 2024, consisting of two multifamily properties in Texas and Arizona, and two office properties in Long Island City, NY, with multifamily assets showing strong leasing at 91% and 67%, while office assets have lower occupancy at 6% and 31% REO Portfolio Details | Location | Property Type | Undepreciated Net Carrying Value ($M) | W.A. % Leased | | :--- | :--- | :--- | :--- | | Arlington, TX | Multifamily | $15 | 67% | | Phoenix, AZ | Multifamily | $17 | 91% | | Long Island City, NY | Office | $36 | 6% | | Long Island City, NY | Office | $31 | 31% | [Detailed Investment Schedule](index=16&type=section&id=INVESTMENT%20DETAIL) This section provides a comprehensive, line-item detail for each investment within the company's portfolio as of September 30, 2024, including schedules for the loan portfolio broken down by property type (Multifamily, Office, Hotel, etc.), as well as for the Net Lease and Other Real Estate properties, with each entry specifying details such as carrying value, origination date, coupon, and maturity date - Provides a detailed breakdown of all **76** loans in the portfolio, categorized by property type, including carrying value, coupon, and extended maturity dates for each loan[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) - Lists individual properties in the Net Lease and Other Real Estate segments, detailing their collateral type, location, carrying value, and Q3 2024 NOI[76](index=76&type=chunk) Appendix Non-GAAP financial measure definitions and consolidated financial statements are provided for reference [Non-GAAP Financial Measures and Definitions](index=22&type=section&id=IMPORTANT%20NOTE%20REGARDING%20NON-GAAP%20FINANCIAL%20MEASURES%20AND%20DEFINITIONS) This section defines the non-GAAP financial measures used throughout the report, which management believes are useful for evaluating performance and comparability, including Distributable Earnings, Adjusted Distributable Earnings, Net Operating Income (NOI), Undepreciated Book Value, and the company's internal loan risk ranking methodology (a 1-5 scale) - Distributable Earnings is defined as GAAP net income excluding non-cash items like equity compensation, general CECL reserves, and unrealized gains/losses, intended to be an indicator of the ability to pay dividends[82](index=82&type=chunk)[83](index=83&type=chunk) - Adjusted Distributable Earnings further adjusts Distributable Earnings by excluding realized gains/losses on asset sales and realized specific CECL reserves[84](index=84&type=chunk) - Undepreciated Book Value is a non-GAAP measure that excludes accumulated depreciation and amortization on real estate investments to provide a measure that management believes enhances comparability with peers[88](index=88&type=chunk) [Consolidated Financial Statements](index=27&type=section&id=CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section presents the unaudited consolidated financial statements for the period ending September 30, 2024, including the Consolidated Balance Sheet, showing total assets of $3.84 billion, and the Consolidated Statement of Operations, reporting a net income of $12.7 million for the third quarter [Consolidated Balance Sheet](index=27&type=section&id=CONSOLIDATED%20BALANCE%20SHEET) As of September 30, 2024, the company reported total assets of $3.84 billion, with key assets including $2.43 billion in net loans held for investment and $0.77 billion in net real estate, and total liabilities of $2.75 billion, with total equity of $1.09 billion Consolidated Balance Sheet Summary (in thousands) | Account | September 30, 2024 (in thousands) | | :--- | :--- | | **Total Assets** | **$3,838,425** | | Loans held for investment, net | $2,430,851 | | Real estate, net | $774,807 | | **Total Liabilities** | **$2,751,900** | | Securitization bonds payable, net | $1,086,908 | | Credit facilities | $848,381 | | **Total Equity** | **$1,086,525** | [Consolidated Statement of Operations](index=28&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20OPERATIONS) For the three months ended September 30, 2024, the company generated net interest income of $20.7 million and total property and other income of $25.9 million, resulting in net income attributable to common stockholders of $12.7 million, or $0.10 per basic share, after total expenses of $36.6 million Q3 2024 Statement of Operations Summary (in thousands) | Account | Three Months Ended Sep 30, 2024 (in thousands) | | :--- | :--- | | Net Interest Income | $20,679 | | Total Property and Other Income | $25,884 | | Total Expenses | ($36,602) | | **Net Income Attributable to Common Stockholders** | **$12,708** | | Net Income Per Share - Basic | $0.10 | [Reconciliation of GAAP to Non-GAAP Financial Information](index=30&type=section&id=RECONCILIATION%20OF%20GAAP%20TO%20NON-GAAP%20FINANCIAL%20INFORMATION) This section provides detailed reconciliations of GAAP figures to the non-GAAP measures presented in the report, including a reconciliation of the consolidated balance sheet to the 'at share' balance sheet, GAAP net book value to undepreciated book value, and GAAP net income to both Distributable Earnings and Adjusted Distributable Earnings - Reconciles GAAP net book value per share of **$8.38** to Undepreciated book value per share of **$9.11** by adding back accumulated depreciation (**$1.78** per share) and adjusting for non-GAAP real estate impairment (**-$1.05** per share)[101](index=101&type=chunk)[102](index=102&type=chunk) - Details the adjustments to reconcile GAAP net income (**$12.7 million**) to Distributable Earnings (**$17.9 million**) and Adjusted Distributable Earnings (**$27.0 million**) for Q3 2024[103](index=103&type=chunk)[104](index=104&type=chunk)